Nigeria’s NNPC claims it is not the only purchaser of Dangote fuel

Nigeria’s state-owned oil company NNPC Ltd. announced on Saturday that it would not be the only buyer of fuel from the Dangote refinery, but that it would take over if the facility sold fuel for more than what was being charged at the pump.

TEXT

This week, the $650,000 barrel-per-day Dangote refinery began producing gasoline, igniting hopes that the nation’s decades-long reliance on expensive, billion-dollar imports would come to an end.

The refinery had stated that rates will be set by the government and that NNPC would be the only purchaser of its gasoline, also known as premium motor spirit (PMS).

WHY IT’S ESSENTIAL

But according to NNPC’s announcement, Dangote would set the price of the gasoline and could sell it straight to marketers, who would then purchase it in large quantities and distribute it to service stations.

Up until today, NNPC was Nigeria’s only source of gasoline imports.

BY THE PIXELS

Earlier this week, NNPC increased the price of gasoline to 855 naira ($0.3905) a liter from an average of 617 naira.

This month, Dangote will begin supplying the domestic market with 25 million liters of gasoline per day; starting in October, that amount will rise to 30 million liters.

Important Quote

“The NNPC Ltd. will only fully offtake PMS from the DRL (Dangote Refinery Ltd) if the market prices of PMS are higher than the pump prices in Nigeria,” NNPC said.

$1 equals 1,580,0000 naira.